Wednesday, January 21, 2015
Russian agriculture and the Eurasian Economic Union.
The Eurasian Economic Union (EEU) came into operation on January 1. It EEU brings together approximately 175 million people in Russia, Belarus, Kazakhstan and Armenia, with a combined GDP of 2.4 trillion dollars. Kyrgyzstan is expected to join by mid-2015. The EEU's goal is to eliminate internal customs borders and establish common trade tariffs. However, Russia's growing desire to enforce its self-imposed embargo on Western agricultural products in retaliation for Ukraine-related sanctions, while promoting agricultural self-sufficiency to curb food inflation, are causing tensions with its EEU partners.
- Agricultural trade is being complicated by Russia's efforts to enforce its food embargo.
- The decline of the ruble and Russia's economic weakness will hinder economic integration in the EEU in the short term.
- Greater economic support and favourable loans for Russian agricultural producers are likely.